Mahindra & Mahindra Financial Services (M&M Finance) reported a 57 per cent year-on-year (YoY) jump in net profit to ₹369 crore for Q2 FY25, up from ₹235 crore in the same period last year. The company’s total income increased by 19 per cent to ₹1,991 crore, with its net interest income (NII) also rising 19 per cent YoY to ₹1,963 crore, compared to ₹1,646 crore in Q2 FY24.
Despite this growth, the NII margin remained flat at 6.5 per cent. The cost of funds saw a marginal rise to 6.5 per cent in Q2 FY25 from 6.4 per cent in the corresponding quarter last year. Disbursements for the quarter declined by 1 per cent YoY to ₹13,162 crore, though the overall loan book expanded by 20 per cent to ₹1.12 trillion. Growth in segments like passenger and commercial vehicles slowed.
As of September 30, 2024, M&M Finance‘s gross non-performing assets (GNPA) rose to 3.83 per cent from 3.56 per cent at the end of June 2024, while net NPA increased to 1.59 per cent from 1.46 per cent. The rise in NPAs was largely driven by the tractor segment, contributing around 40 per cent of the increase. The company expects improvement in Q3 FY25 with Kharif cashflows.
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The company’s credit cost declined slightly to 2.3 per cent, down from 2.4 per cent in Q2 FY24, and collection efficiency remained steady at 96 per cent, matching last year’s performance.
